Wednesday, January 06, 2016

Welcome,
luminant friends, to 2016, and let it be a sweet 16 of potential and
possibility, accomplishment and achievement. 2016 has context, namely 2015, to
suggest its contours, so let’s take a look back at some of the year’s
highlights both within and without the nuclear sphere to see if we can at least
divine the outline of the year to come. The past is not prologue, it is all the
earlier chapters in an ongoing story.

The value of nuclear energy to United States energy policy became clearer than
ever in 2015, but the struggle to have that value properly recognized became
one of the key issues of the year and will continue into and well beyond 2016.
As you’ll see, determining that value is not nuclear science; the shorthand
equation is that every nuclear energy facility represents an emission-free
economic powerhouse.

But its value has been neglected to the point that facilities are allowed to
shutter as economically unviable. An any time, but especially in 2015,
following the signing of the Paris Agreement on climate change, that’s
shortsighted. Keep this in mind as we move along because almost everything
relates to the value of nuclear energy – enhancing it, but most definitely not
damaging it.

So, 2015. These events impacted the nuclear energy industry but had wider
application. If you read about them in the news, nuclear energy might not even
have been mentioned in the stories. But it was there, sometimes in an important
role.

Reauthorization
of the U.S. Export-Import Bank – NEI was a central player in a
coalition of manufacturing and trade interests that overcame significant
political differences on Capital Hill to reauthorization this important
institution that enables U.S. trade around the world. Whatever the
political squabbles that engulfed the Ex-Im Bank, it has proven an essential
tool for American companies trading abroad. So essential, in fact, that the
Depression-era bank has counterparts in virtually every country with serious
trade ambitions. With the continuing boom of nuclear energy development
worldwide, the U.S. bank’s importance has only become more manifest. To have it
shuttered and revived in the course of a single year was an astounding
political feat – triumph snatched from defeat as rarely happens.

The
Paris Climate Change Agreement– Nuclear energy has had an
on-off relationship with the U.N. Conference of Parties, which has been meeting
annually over the last couple of decades to hammer out a successor to the Kyoto
Protocol. With the signing of the Paris agreement, the relationship is
definitely on. The agreement is absent of any specific recommendation for how
to lower carbon dioxide and other greenhouse gas emissions. It’s more about what
must be done – and that is to lower global temperatures 2 degrees centigrade by
2100. Countries now have a strong additional reason to strengthen or
begin a relationship with the atom – think China for the former category,
U.A.E. for the latter. This is nuclear value writ large and fully recognized.
To call that value existential would be overly melodramatic, but many countries
are leveraging or will leverage nuclear energy as though their worlds depend
upon it – because they do. This is the world the Paris Agreement could make
manifest.

The
White House Summit on Nuclear Energy- This happened right
before the Paris conference and signaled the administration’s support for
nuclear energy in a timely way. The event recognized the indispensable role
that nuclear energy must play in any successful effort to reduce greenhouse gas
emissions from the electric sector and focused on emerging nuclear technologies
that will power future generations. The administration, led by Energy Secretary
Ernest Moniz, along with industry leaders. highlighted these emerging nuclear
tech options at the COP21 conference. Watch the White House summit here.

Now, let’s zero in on items that impacted the American industry a bit more
specifically:

The Nuclear Regulatory
Commission’s Project AIM and reducing the cumulative impact of
regulation – A strong regulatory regime supports the safety and security at
U.S. nuclear facilities, but rulemakings that impose significant cost with
little or no safety or security benefits simply saps resources that could be
better utilized. There were signs of progress at the agency in 2015 that will
continue into 2016. The commission directed NRC staff to ensure that regulatory
actions are properly prioritized. The NRC’s Project AIM 2020, which has the
overall goal of right-sizing an agency that grew significantly in the new
century, will contribute to the effort. It will also re-baseline the
commission’s regulatory activities and develop a prioritization process
covering all agency activities.

Delivering
the Nuclear Promise– The industry has launched a multiyear
initiative that takes a similar approach as Project AIM to the industry’s own
procedures and practices to achieve new levels of efficiency and efficacy
without any reduction in safety. In fact, building efficiency into our
facility operations typically enhances safety. The plan reflects the industry’s
commitment to safe and reliable operations, a determination to assure future
viability through efficiency improvements and a drive for regulatory and market
changes that would fully compensate the value of nuclear facilities. This
initiative, teaming NEI with the Institute of
Nuclear Power Operations (INPO) and the Electric Power Research Institute
(EPRI), has elicited industry enthusiasm and will begin in earnest in 2016 and
beyond.

Lessons
Learned – and applied - from the Fukushima Daiichi accident–The
U.S. nuclear energy industry has analyzed the events in Japan and responded by
significantly raising the bar on safety at our plants. In fact, measures taken
at American reactors since 2011 have set the standard internationally for
maintaining safety even in the face of extreme natural events. More than
two-thirds of U.S. reactors have implemented the NRC’s post-Fukushima safety
requirements well ahead of the 2016 deadline, with a few remaining sites
expected to join the majority in the coming year. A tailored, yet comprehensive
system of portable safety equipment called FLEX is the cornerstone of the
industry’s response to the accident, in tandem with NRC actions. These will
protect nuclear facilities and ensure that emergency equipment is close to hand
for any response needed during these extreme storms.

Second license renewal– Nothing prevented nuclear energy facilities from proceeding past their
initial 40 year license terms and they did; virtually all plants have had their
licenses renewed for an additional 20 years. Time, knowing no master, has
continued on and now, nothing would seem to prevent a second 20-year license
renewal. This is not uncommon for large industrial structures; for essential
infrastructure. In 2015, NEI developed a “roadmap” for second license renewal
and a white paper (at the link) outlining the process and issues for
consideration, such as effective management of long-lived structures and
components. Something to look forward to in 2016: Congress established a March
deadline for the NRC to submit a plan and timeline for reviewing the initial
second license renewal applications.

The
pending operation of Watts Bar 2 – Many people ring in the year
with a celebration and the nuclear industry is no different. The Tennessee
Valley Authority’s nuclear plant passed its last regulatory milestone in 2015
when the NRC issued it an operating license for the reactor. It will bring
another 1,150 megawatts of electric generating capacity to the grid to the
Tennessee valley and is expected to go online in 2016. That’s
something to celebrate.

Recognizing
the value of nuclear energy –
Almost everything discussed in this post addresses, in concrete terms, the
value of nuclear energy plants. But let’s reduce it all to a simple premise:
every nuclear energy facility is an emissions-free economic powerhouse.
Properly valuing nuclear power involves the issues already discussed, plus
more: energy markets, state clean energy portfolios, the need for
reliable, diverse energy sources (demonstrated most dramatically by the polar
vortex a couple of years ago) and many other factors.

There has been movement to address the issue. In 2015, The Federal
Energy Regulatory Commission (FERC) and a number of regional transmission
organizations took significant steps to address flaws in electricity markets
that fail to provide the price signals needed to support investment in nuclear
power plants. NEI joined four other energy associations to develop principles
aimed at establishing more efficient pricing mechanisms in competitive electricity
markets. This group urged FERC to work with the regional grid operators to set
expectations for the long-term goals of these markets. FERC subsequently began
a rulemaking to address electricity price suppression and said it intends to
address other issues in future rulemakings.

To repeat, it’s a start. We may expect that much more will follow – in 2016 and
beyond.

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